Lloyds Luxuries Ltd Management Discussions

GLOBAL ECONOMY

As of 31^st March 2025, the global beauty and personal care industry was valued at approximately USD 420450 billion, reflecting a compound annual growth rate (CAGR) of 5-6%. This growth has been supported by increased consumer spending on self-care and wellness, a marked shift toward clean, sustainable beauty products, and the rapid adoption of digital channels for product discovery, engagement, and booking of services.

The sectors growth continues across both product and service segments, with skincare, haircare, and professional grooming services showing significant expansion. The premium and personalized service category is gaining traction, especially in urban and developed markets. Technology is playing a pivotal role, with increased use of AI for personalization, e-commerce for access, and social media for brand influence.

In the United Kingdom, a mature benchmark market, the hair and beauty sector contributes approximately GBP 6 billion annually. However, the industry has faced increasing operational pressures. According to the National Hair and Beauty Federation (NHBF), 21% of businesses reported operating at a financial loss, while 78% implemented price increases to maintain viability in the face of inflation, rising energy bills, and staffing shortages. The sectors workforce contracted by 7.5%, although a modest increase was observed among younger age groups (16-34 years). This indicates potential long-term resilience, albeit with short-term challenges around recruitment and cost optimization.

Globally, there is heightened consumer interest in natural ingredients, ethical sourcing, and wellness- infused services, all of which have reshaped service delivery expectations. Sustainability and transparency are no longer optional but essential for long-term consumer loyalty. The strategic focus for businesses is therefore shifting toward cost control, technology integration, customer experience enhancement, and workforce stability.

INDIAN ECONOMY

The Indian beauty and grooming services sector continues on a high-growth trajectory, aligning closely with global trends. Rapid urbanization, rising disposable incomes, and increased exposure to global lifestyle and grooming standards have positioned India as a key emerging market in the personal care space. The sector is witnessing accelerated demand for premium grooming experiences, especially among men, and has evolved significantly from a product-focused market to a service-driven ecosystem.

In comparison to developed markets like the UK, India offers favourable growth potential, supported by its large consumer base and relatively lower saturation levels. However, operational challenges persist. Key cost pressures arise from high commercial rental rates, energy and utility expenses, and labour shortages in skilled categories such as barbers, therapists, and wellness professionals.

Consumer behaviour in India is also undergoing a marked transformation. There is an increasing preference for hygienic, well-curated, and digitally accessible service experiences. Booking applications, loyalty programs, and personalized service recommendations have become essential for engagement. Additionally, consumer awareness around clean grooming, derma- certified products, and sustainable practices is growing rapidly.

Businesses operating in this environment are compelled to strike a careful balance between delivering premium services and managing operational efficiency. Areas of strategic focus include pricing rationalization, in-house training and upskilling programs, digitization of customer engagement, and expansion into Tier 1 and Tier 2 cities where demand is rising. Government-led initiatives in the skill development and MSME support sectors may further bolster the industry if leveraged effectively.

INDUSTRY OVERVIEW

The salon industry is undergoing a dynamic and exciting transformation globally and within India. What was once seen as a routine service has now become an experience-led, lifestyle-driven sector. Todays consumers no longer just seek a haircut or a facial-they seek curated, personalized beauty journeys. This industry spans an array of services, including hairstyling, colouring, skincare, nail care, spa treatments, and wellness therapies, tailored to meet the preferences of a diverse demographic.

A defining factor in this evolution is the rise of the "experience economy" where clients value not just the end result, but the ambiance, service quality, hygiene, and the emotional satisfaction of being pampered. Salons are now investing in holistic environments- where service delivery, aesthetics, and customer engagement blend seamlessly. Digital booking systems, loyalty apps, and feedback-driven service enhancements are also reshaping the salon landscape, making it more responsive and client-focused than ever before.

The mens grooming industry has become one of the most dynamic segments within the beauty and personal care sector. Traditionally overlooked, this segment has now emerged as a major growth driver-thanks to shifting gender norms, growing self-care awareness, and the influence of media and lifestyle trends. Whats fueling this boom? Its a blend of millennials and Gen Z consumers who are increasingly conscious about appearance, hygiene, and personal wellness. Social media, celebrity culture, and the increasing visibility of skincare and beard care rituals among male influencers have played a critical role.These younger demographics are open to experimenting with facials, grooming products, hair treatments, and anti-aging regimens.

But the trend doesnt stop with the young. Even older age groups are investing in grooming, seeking age- appropriate skincare, therapeutic treatments, and head- to-toe care routines. The result? A thriving, diversified market with products and services tailored to men of all ages, positioning the mens grooming industry as one of the fastest-growing verticals in beauty and wellness.The industrys growth is no longer confined to metro cities. Tier II andTier III cities are emerging as powerful growth engines, powered by urbanization, rising incomes, and modern grooming expectations. Franchise-led salon chains are entering these markets with affordable, standardized services, reshaping consumer habits and creating brand trust in underserved regions.

A major driver of this shift is the rise of the "experience economy." Clients now value ambiance, hygiene, service quality, and emotional satisfaction just as much as the end result. Salons are responding with elevated environments, tech-enabled personalization, digital bookings, and loyalty programs to enhance client engagement.

Globally and locally, the grooming sector is thriving- fueled by changing consumer behavior, inclusivity, and innovation. From premium urban lounges to high- quality small-town salons, the industry is now about more than beauty-its about well-being, self-expression, and living a care-driven lifestyle.

Industry Overview: Opportunities

In the ever-evolving landscape of Indias salon market, the key to success lies in the realms of customization and personalization. This strategy not only enhances customer satisfaction but also builds enduring loyalty. By tailoring services to individual preferences and addressing various skin types, beauty salons can forge deeper connections with their clientele.

Leveraging cutting-edge technology, such as advanced skin analysis tools and AI-driven beauty consultations, salons can delve into the unique needs of each client. Detailed analysis and data-driven insights enable salons to provide bespoke skincare regimens and treatments, precisely matching the specific requirements of each customer.

This approach elevates the standard of service while creating a memorable and immersive client experience. From personalized product recommendations to customized treatment plans, every aspect of the salon visit is meticulously curated to cater to the individual, fostering a sense of exclusivity and indulgence.

By harnessing the power of customization and personalization, beauty salons can transcend traditional norms and establish themselves as pioneers in the industry. This not only attracts new customers but also cultivates a loyal customer base who value the attention to detail and personalized care offered by the salon. Ultimately, this strategy propels growth and sustains success in the competitive Indian salon market.

Transition from an unorganized to an organized market presents a significant opportunity for established salon chains. These chains, with their existing brand recognition, resources, and operational expertise, are well-equipped to leverage this trend. They can expand their market share by attracting customers who prefer the professionalism and reliability of organized players. Additionally, established chains can set industry standards, influence market practices, and benefit from economies of scale, further enhancing their competitive edge.By capitalizing on this shift, established salon chains can accelerate their growth, improve customer loyalty, and increase profitability.

As a result, the beauty salon market continues to evolve and expand, driven by the strategic expansion of salon chains into previously underserved regions, ultimately benefiting both consumers and industry players alike.

Industry Overview: Restraints

The Indian beauty salon industry is experiencing heightened competition, driven by the growing presence of organized chains and a dense network of independent salons. In major urban centers like Delhi and Mumbai, this rivalry has intensified, leading to price wars and exerting considerable pressure on profit margins.

The proliferation of salons offering similar services presents a significant challenge in terms of differentiation. Consumers-now heavily influenced by digital platforms, social media trends, and online review-expect more than traditional services. They seek personalized, experience-driven offerings, high standards of hygiene, and seamless digital interactions.

To remain competitive, salons must evolve beyond pricing strategies. This includes adopting technology for bookings and customer engagement, offering curated services aligned with current beauty trends, and building strong brand loyalty. Independent salons, in particular, must define a clear value proposition and cater to niche demands to sustain relevance.

In this dynamic and saturated market, continuous innovation and a deep understanding of evolving consumer expectations are essential for long-term success and profitability. Consequently, the relentless battle for market share not only heightens competitive pressures but also underscores the imperative for salon owners to continuously innovate and adapt to survive and thrive in this fiercely contested arena of the beauty industry.

INTERNAL CONTROL SYSTEMS ANDTHEIR ADEQUACY

Our company has established a robust internal control framework that aligns with the scale and specific nature of our business operations. The Internal Audit function operates with clearly defined scope, responsibilities, and authority, ensuring alignment with industry standards and regulatory expectations. To maintain independence and objectivity, the Internal Audit team reports directly to senior management, which in turn reports to the Chairman of the Audit Committee of the Board.

Controls are systematically monitored and periodically reviewed to verify that transactions are properly authorized, recorded with accuracy, and that company assets are well protected. Throughout the year, our internal financial controls have remained both adequate and effectively implemented. Based on findings from internal audit reviews, relevant process owners promptly initiate corrective measures, contributing to a continually strengthening control environment across the organization.

FINANCIAL REVIEW

(Rs. In Lakhs)

Sr. Financial Results No.	2024-25	2023-24
1. Turnover (Including other Income)	4,666.94	4,109.33
2. Earning before Interest, tax, depreciation and amortisation expenses (EBITDA)	(170.79)	(250.27)
3. Profit before tax	(682.04)	(829.49)
4. Profit after tax	(665.94)	(800.66)
5. Earning Per Share (basic) (Rs.)	(28.35)	(35.57)
6. Earning Per Share (diluted) (Rs.)	(26.91)	(32.89)

The Financial performance of the Company for the Financial Year 2024-25 is described in details in the Directors Report under the head overview of Companys financial performance.

HUMAN RESOURCES / INDUSTRIAL RELATIONS

human capital is not just a resource ? it is the driving force behind our continued success. We hold a deep- rooted belief that our employees form the core foundation of all our achievements. Recognizing that our people are our greatest strength, we are committed to nurturing a culture that values talent, promotes growth, and builds long-term partnerships with every team member.

To empower our workforce, we have established a dedicated in-house training academy that provides ongoing, structured learning programs tailored to enhance both technical and professional skills. This initiative ensures that our employees stay up to date with industry standards and continue to grow in their roles. Continuous training is embedded in our operational ethos, allowing individuals to sharpen their expertise and contribute meaningfully to our strategic goals.

In addition to professional development, we offer a robust Employee Stock Option Plan (ESOP), thoughtfully crafted to recognize dedication, foster a sense of ownership, and reward performance across all levels. This initiative is pivotal in reinforcing longterm employee commitment and loyalty. The ESOP serves not just as a financial benefit, but as a symbol of trust and shared success between the organization and its people.

Our holistic approach to human capital ? centered on growth, engagement, and well-being ?enables us to attract and retain top-tier talent while cultivating a high-performance, value-driven culture.

KEY FINANCIAL RATIOS

Sr. No. Particulars	2024-25	2023-24	Variance	Explanation (For variance of 25% or more):
1. Current Ratio	2.53	2.07	22.23%	NA
2. Debt Service Coverage Ratio	-	-	0.00%	NA
3. Return on Equity Ratio	-	(6.52)	0.00%	NA
4. Inventory Turnover Ratio	(0.10)	(0.12)	-15.68%	NA
5. Trade Receivables Turnover Ratio	1.60	1.92	-16.80%	NA
6. Trade Payables Turnover Ratio	4.01	4.95	-19.08%	Trade Payables Turnover Ratio has decreased due to decrease in Credit Purchases of inventory as the inventory levels was sufficently managed.
7. Net Capital Turnover Ratio	2.42	4.03	-40.00%	Net Capital Turnover Ratio has improved due to increase in Net Sales. The company is able to increase the sales due to effectively utilising the working capital employed in the business.
8. Net Profit Ratio	6.33	^ 19.93	-68.27%	The losses incurred during the current financial year, resulting from the provision for ESOP expenses, amortisation of Preoperative Capitalised Expenses and the fact that the relative increase in costs has outpaced the relative increase in sales, have impacted the companys financial ratios resulting in decreased net profit ratio.
9. Return on Capital Employed	(0.14)	(0.20)	-27.59%	NA
10. Return on Investment	(0.10)	(0.12)	-11.39%	NA

CAUTIONARY STATEMENT

Statements in the Management Discussion and Analysis and Directors Report describing the Companys strengths, strategies, projections and estimates, are forward looking statements and progressive within the meaning of applicable laws and regulations. The Actual results may vary from those expressed or implied, depending upon economic conditions, Government Policies and other incidental factors. Readers are cautioned not to place undue reliance on the forward looking statements.